Is Ukraine Next?
August 23rd 2008 17:04
Jonathan Kennedy has some valuable information for geo-politics junkies which could, also, have some profound effects on oil and natural gas markets.
In Russia-Georgia Conflict Is Just The Beginning: Watch What Happens To Energy Prices When Russia Targets Ukraine, Kennedy points out that 85% of Europe's natural gas flows through Ukraine. Russia is positioning itself to be the OPEC of natural gas. Not only will Russia not give up its warm water ports in the Black Sea, or the buffer zone between it and the West, but it will not allow defensive missiles to be placed in Ukraine as will be done in Poland. There is a big potential for more face offs between Russia and the West.
Why does this matter? Energy markets are nervous about Georgia because it is home to the Baku-Tbilisi pipeline, which transports about a million barrels of oil a day. A million barrels is a tiny percentage of global demand, but the crisis still spooked the markets (with reason). Pipelines in the Ukraine, in contrast, are responsible for delivering 85% of Europe's gas supply.
In Russia-Georgia Conflict Is Just The Beginning: Watch What Happens To Energy Prices When Russia Targets Ukraine, Kennedy points out that 85% of Europe's natural gas flows through Ukraine. Russia is positioning itself to be the OPEC of natural gas. Not only will Russia not give up its warm water ports in the Black Sea, or the buffer zone between it and the West, but it will not allow defensive missiles to be placed in Ukraine as will be done in Poland. There is a big potential for more face offs between Russia and the West.
Why does this matter? Energy markets are nervous about Georgia because it is home to the Baku-Tbilisi pipeline, which transports about a million barrels of oil a day. A million barrels is a tiny percentage of global demand, but the crisis still spooked the markets (with reason). Pipelines in the Ukraine, in contrast, are responsible for delivering 85% of Europe's gas supply.
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